Does car insurance cover international rentals?
Most U.S. auto insurance policies don't extend coverage outside the country, so if you rent a car abroad and get into an accident, your existing policy likely won't protect you. Before you pick up the keys, it helps to understand what coverage you have and how to fill the gaps.
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Is it illegal to drive a rental car without coverage internationally?
In many countries, yes. Minimum liability coverage is typically required by law, and it's your responsibility to either prove you have it or purchase it at pickup. Even in places where it isn't legally mandated, driving uninsured abroad can leave you personally responsible for vehicle damage, medical costs, and legal liability.
Requirements and rental agreements vary country to country. Some companies include minimum liability in the base rate, but others don't. Read the rental agreement carefully and confirm what's included.
Rental coverage when traveling to Canada or Mexico
Canada and Mexico are the two most common international destinations for U.S. drivers, and the rules are very different for each.
Canada: Your U.S. auto insurance will usually protect you in Canada with the same coverages and limits you have at home. If your policy covers rental cars in the U.S., it may also extend to cars you rent while in Canada, but it's worth confirming with your insurer before you go. Learn more about driving in Canada.
Mexico: U.S. auto insurance policies don't provide coverage in Mexico, but Mexican law requires all drivers to have insurance. So you'll need a separate Mexico auto policy any time you drive south of the border — whether in your own car or a rental.
Progressive offers Mexico auto insurance by MexPro, though it's important to note that these policies only apply to cars rented in the U.S. and driven into Mexico — not cars rented locally inside Mexico. Learn more about Progressive Mexico Auto Insurance by MexPro and whether you need car insurance for a Mexico trip.
How to get international rental coverage
If your U.S. policy doesn't cover you abroad, you have a few options.
Travel insurance with rental coverage
Some travel insurance plans include rental car protection as part of a broader package covering trip cancellation, medical emergencies, and other travel-related losses. Coverage levels vary by plan, so be sure to review the terms before assuming your rental is included. Progressive travel insurance is worth considering if you want to bundle rental protection with broader trip coverage.
Credit card coverage
Many travel rewards and premium credit cards include rental car coverage as a benefit, and it may apply to international rentals. To activate it, you typically need to pay for the rental with that card and decline the rental agency's own collision damage waiver.
Before relying on this option, there are two things you should know. First, according to the Insurance Information Institute, credit card rental benefits are usually secondary coverage, which means they kick in after your personal auto insurance. Second, credit cards generally don't cover personal liability, so you may still want to consider liability coverage from the rental company.
Coverage terms, exclusions, and eligible countries vary by card, so contact your card's benefits administrator before your trip to confirm what applies to your destination.
Coverage from the rental company
Buying coverage directly through the rental agency at pickup is the most straightforward option, and in some countries, it may be your only option. It tends to cost more on a per-day basis, but it keeps things simple and eliminates the uncertainty of coordinating coverage across multiple sources.
What coverage should I consider when renting a car abroad?
International rental companies typically offer several types of coverage. What's required by law and what's automatically included in your rental rate varies by country.
- Collision Damage Waiver (CDW)/Loss Damage Waiver (LDW): The Insurance Information Institute notes that a CDW or LDW isn't an insurance policy. It's a contractual agreement in which the rental company takes on responsibility for damage or theft of the vehicle. Depending on the terms, it may also cover charges the rental company assesses for lost rental income, towing, or administrative costs while the car is being repaired. Keep in mind that certain behaviors such as speeding, driving on unpaved roads, or driving while intoxicated can invalidate the waiver entirely.
- Liability insurance: Covers damage or injury you cause to other people or property. This coverage is especially important if you don't have a U.S. policy that extends abroad.
- Personal accident insurance (PAI): Covers medical expenses for you and your passengers after an accident. Whether you need it depends on what your health coverage and travel insurance already provide.
How to rent a car internationally
Check to see if you need an International Driving Permit
More than 150 countries recognize the International Driving Permit (IDP), and some require it to rent a car. The IDP is an official translation of your U.S. driver's license into ten languages. You must carry your actual license along with it. To get one, apply through AAA or the National Auto Club before you leave. The fee is $20, you must be at least 18, and the IDP can only be issued in your home country.
Check local rental laws
Rules vary more than most travelers expect. Minimum and maximum rental ages, transmission availability, and cross-border restrictions all differ by destination. If you're planning to take a rental from one country into another, confirm the rental agreement allows it — many don't without prior approval and additional coverage in place.
Study rules and signs
Before driving in an unfamiliar country, review local traffic laws and any signage that doesn't have a direct equivalent at home. If you plan to cross a border, find out what documentation is required. Some crossings ask for paperwork beyond your passport and IDP, and taking a rental car across a border may require advance notice to the rental company.
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